20040217_749.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER SMITH
COMMISSIONER HANSEN
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
WORKING FILE
FROM:WAYNE HART
DATE:FEBRUARY 13, 2004, 2004
RE:CENTURYTEL TARIFF ADVICE INTRODUCING THE SELECT-PAK
PACKAGE OF SERVICES AND RENAMING AND GRANDFATHERING
SIMPLE CHOICE PACKAGES. TARIFF ADVICES: CENTURYTEL OF
IDAHO 2004-01 AND CENTURYTEL OF THE GEM STATE 2004-02.
BACKGROUND
On January 29 2004, CenturyTel filed a tariff advice for both CenturyTel ofIdaho and
CenturyTel of the Gem State, both of which introduce a new package of services called "Select
Pak" for residential customers and "Business Assist Select" for business customers. In addition
the Company intends to rename the "Simple Choice" product as "Simple Choice One" and
Simple Choice Two , and limit its availability to existing customers. The existing product
called "Simple Choice One with Voice Mail" would be changed to "Simple Choice" for
residential customers and "Business Assist Advantage" for business customers. The Company
proposed a February 29 , 2004 effective date, which provides the required 30-day notice.
The Company provided a cost study that indicated the new product would be priced
above cost. While it expects these changes to enhance revenues over time, a detailed revenue
analysis was not provided.
STAFF ANALYSIS
Staffhad some concerns about the grandfathering of the existing Simple Choice One and
Two packages. These packages provide a much broader range of features (a choice of 25
. features instead of only 5) than the new Select Pak options, at a lower price for all of Gem
DECISION MEMORANDUM - 1 -FEBRUARY 13, 2004
State s customers and CenturyTel ofIdaho s business customers. CenturyTelofIdaho
residential customers would save only 25 cents with the Select Pak product.
However, all existing Simple Choice One and Two customers will be allowed to continue
to subscribe to these products. In addition, the Simple Choice One with Voice Mail product
which would be renamed Simple Choice, will still be available, offering an even wider choice of
features for a very reasonable increment. Therefore, Staff believes customers will still have
adequate options available at prices that compare favorably to those of other companies.
Staff believes any increase in revenues due to these changes will initially be minimal and
routine Company audits will address any long-term impacts.
ST AFF RECOMMENDATION
Staff recommends the approval of these two Tariff Advices.
COMMISSION DECISION
Does the Commission wish to approve CenturyTel ofIdaho Tariff Advice No. 2004-
and CenturyTel of the Gem State Tariff Advice No. 2004-02?
i:udmemos/ctel sel-pak
DECISION MEMORANDUM - 2-FEBRUARY 13 2004